"U.S. births fell in 2008, probably because of the recession," announces an Associated Press report. That makes intuitive sense, so not too many have questioned it. But Paul Krugman, noting someone's apt observation that pregnancies last nine months, is perplexed:
Abortion aside, to reduce births in the first three quarters of 2008 in response to a recession that started in Dec. 2007 would have taken pretty impressive rational expectations.
Is it possible parents instinctively responded to hints of a recession before even economists knew how bad it was going to be? It sounds absurd. So what explains the trend? In Krugman's words: "What are we missing?"